Alfresco Acquired by Private Equity Firm

Alfresco Software, Inc. announced today that it is being acquired by private equity firm Thomas H. Lee Partners (“THL”).

Alfresco had been rumored to be on the block for quite some time. There was speculation that cash was dwindling, but I have no way to confirm that was the case.

To be sure, Alfresco has a vision for the future that is going to require resources, and making yourself available to be purchased is one way to get resources. A private equity acquisition couldn’t have been their first choice, but there just didn’t seem to be any other companies out there for whom acquiring Alfresco made any kind of sense.

How Will This Affect You?

Private equity firms are investors–they buy companies with the express intent of selling that company in the future to make a profit. This is very different than if Alfresco had been acquired by a larger tech company or a competitor in the ECM space or if had raised funds through an IPO.

If you are a customer and you are aligned with Alfresco’s future vision of content services running in the cloud, decomposed into a set of independent services, then you should be hopeful that THL also believed in that vision, and that this acquisition will make it more likely to materialize. Day-to-day, I suspect nothing much will change for customers in the short-term.

If you run Community Edition, or your content management needs are not quite as visionary, cross your fingers and hope that the new investors don’t completely ignore the the parts of the business that don’t have a direct and immediate impact on their return on investment.

Private equity firms don’t buy and hold. The clock is now ticking on THL’s investment. Look for a renewed emphasis on anything and everything that can pump up Alfresco’s attractiveness to future suitors or public investors.